Tuesday, July 27, 2010

food security

Could Australia lose control of its food resources?

There are fears that Australia's ability to feed itself and export to other countries is at risk to foreign investors buying prime land.

Transcript

TICKY FULLERTON, PRESENTER: Australia is a country that easily feeds itself and, through our food exports, tens of millions of people in other countries as well.

It's something which we take for granted, but there are those who believe that as the world's population increases, Australia risks losing control of its food resources.

Already foreign interests are increasingly looking to Australia to expand their food production capabilities through the purchase of prime agricultural assets and it seems at this stage there's little that can be done to stop it.

As part of a multimedia special involving ABC's News Online and Radio National's Background Briefing, Andrew Robertson has prepared this report.

ANDREW ROBERTSON, REPORTER: In a country as steeped in farming as Australia, food security is not a hot-button topic, but according to experts who've studied the issue, such as University of Technology's Professor Julian Cribb, the clock is ticking.

JULIAN CRIBB, UNI. OF TECHNOLOGY, SYDNEY: It is more important in my view than the global financial crisis, because you can do without money at a pinch, you can't do without food. It's probably more urgent than the global climatic issues, because they're gonna take a long time to build up in the background. This is something that is gonna happen within a generation.

ANDREW ROBERTSON: In his new book, The Coming Famine, Professor Cribb paints a bleak future of a planet where food is in very short supply. The world's population is tipped to hit nine billion by 2050 and 11 billion just 10 years later.

Food production will need to double, but many countries will be left behind, particularly those like China, which is already feeling the strain of feeding its current inhabitants.

JULIAN CRIBB: Well I once asked that question to some Chinese academics, I asked them what the carrying capacity of China was in the long term, and they said they thought about 640 million people. And this is against a peak population in China of the order of 1.6, 1.8 billion people. So for a period of time, China is going to have to feed probably around about three times as many people as it can carry in the long run.

ANDREW ROBERTSON: According to Professor Cribb this shortage of food is going to have serious implications for countries like Australia.

JULIAN CRIBB: Australia has always had foreign ownership of some of its food assets, but in time to come, as countries become more and more nervous about their own food security, we will see much increasing emphasis on trying to acquire Australian food assets.

ANDREW ROBERTSON: The evidence suggests that process is already underway. Just this month, Singapore-based Wilmar outbid China's Bright Foods to buy CSR's Sucrogen sugar division. At $1.6 billion, that deal is being heavily scrutinised by the Foreign Investment Review Board, but others are not.

An increasing number of prime Australian farms are being purchased by overseas companies. For example, Victoria's largest land sale this year was the transfer of the MountElephant station in the west of the state to a company in Sweden.

The Packer family has sold 17 properties to a British private equity firm. The American pastoral giant Westchester has played $40 million for properties at properties in Moree in New South Wales and Glenfine in Victoria, whilst a company registered in Bahrain is running its eye over the vast Cubbie Station in south-east Queensland.

Bill Heffernan is the chairman of the Senate inquiry into food production. He shares Professor Julian Cribb's concerns about the surge in foreign investment in Australian agricultural assets.

BILL HEFFERNAN, CHAIRMAN, INQUIRY INTO FOOD PRODUCTION: We're asleep in Australia to the fact that a lot of places round the world such as China, India and the Arab states are looking at where they're gonna be in 40 or 50 years' time and they're making provision now for their food task in the future.

ANDREW ROBERTSON: Which according to Bill Heffernan eventually could see Australian farmers becoming tenants in their own country.

BILL HEFFERNAN: Because we are an attractive destination for safe capital investment, we will lose control of our destiny to outsiders and the worst of that will be government outsiders.

ANDREW ROBERTSON: A look at the Tasmanian dairy industry provides some salutary insights.

JIM HURSEY, DAIRY FARMER: It's actually costing us to go to work. We're actually going to work, doing our job and at the end of the day, we're getting a bill for doing our job! How many people do you know that do that? No one.

ANDREW ROBERTSON: In the Apple Isle, dairy farmers have had enough. Their industry is dominated by two foreign-owned companies - New Zealand's Fonterra and Japan's Kirin. Milk prices at the farm gate have been slashed to the point where farmers say they can no longer make a profit.

GLENYS FURZE, DAIRY FARMER: We've been milking 25 years and our farm is really our super fund, like a lotta farmers. And we're just seeing that going down the drain.

ANDREW ROBERTSON: For Bill Heffernan, it's a classic case of how Australians can be the big losers when foreign investment is allowed to go unchecked.

BILL HEFFERNAN: I chaired the milk inquiry in Tasmania as well, you see? Took evidence down there, and like 26 cents a litre. Can I tell you your viewers that this is a con job on farmers?

ANDREW ROBERTSON: The irony is that although foreign investment has contributed to the plight of Tasmanian dairy farmers, for many of them, foreign investment could also be the only hope of escape.

With no Australian buyers coming forward for their farms, estate agents are hawking them overseas. One agent alone has 40 farms she's trying to sell in China.

GLENYS FURZE: No-one wants to see our farms sold out to another country. There's not one of us wanna see that. But what do we do? Do we sit back with our hands tied and go broke and lose everything?

ANDREW ROBERTSON: The answer for many people connected with agricultural industries is for Australia's foreign investment laws to be tightened.

TICKY FULLERTON: And in the second part of our investigation tomorrow night, we'll be examining the New Zealand model, which could provide the answer to this growing problem.

For more detailed coverage on the battle for control of Australian farmland, you can visit ABC News Online at abc.net.au/news